The proposed capital gains tax (CGT) is expected to have little effect on residential property price growth, which a recent survey indicated will remain broadly positive.
Colliers International’s quarterly residential property market outlook survey found a net positive 15% of respondents expect median house prices to increase over the next 12 months. This means that more respondents expect median residential property prices to rise than those who expect a decline.
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However, this is lower than expectations from previous quarters – down from a net positive 23% in December 2018 and a net positive 26% in September 2018.
When asked how much sale prices would be impacted by the introduction of a CGT, 42% of respondents indicated less than 5%, while 37% stated more than 5%. Also, just over 22% indicated a capital gains tax would have no impact on sale prices.
All regions recorded a lower overall result than the previous survey, said Chris Dibble, research and consulting director at Colliers. “Queenstown held onto its top spot for the tenth consecutive quarter, with a net positive 39% of respondents expecting house price growth,” said Dibble.
“Tauranga/Mt Maunganui remained in second place, with a net positive 30%, while Wellington has held onto third place, with a net positive 26%.”
Dibble said median price expectations in Auckland overall were negative for the first time, with a net negative 10%.
“This reflects the current market conditions, with REINZ data showing median prices have decreased by 0.5% over the past year.”